The Sandbox (SAND)

The Sandbox, in simple terms

The Sandbox is a virtual world where users can create, own, and monetize their gaming experiences using the Ethereum blockchain.

It operates much like a digital playground, where players use the platform's native token, SAND, to buy land and assets or to create and play games.

It's akin to popular games like Minecraft, allowing for creative and interactive experiences, but with the added twist of blockchain technology to secure ownership and transactions.

The Sandbox was developed by Pixowl, founded by Arthur Madrid and Sebastien Borget. Pixowl was acquired by Animoca Brands in 2018.

So... It's like Decentraland?

Well, it's similar, but not exactly the same.

If you haven't read my analysis of Decentraland, go check it out here

Key Differences

Focus:

• The Sandbox: Emphasizes gaming, with tools for users to easily create and play games.
• Decentraland: Focuses on a broader range of virtual experiences including art, entertainment, and real estate.

Asset Creation:

• The Sandbox: Uses voxel-based assets (block-like structures).
• Decentraland: Utilizes traditional 3D modeling for creating diverse assets.

Governance:

• The Sandbox: More centralized with the core team having significant control.
• Decentraland: Operates as a decentralized autonomous organization (DAO) where decisions are community-driven through token voting.

What problem are they solving?

Other than solving the general problem of in-game assets being worthless in Web2 games, The Sandbox is focused on solving the two following problems:

• Limited Monetization for Creators: Content creators in conventional game ecosystems often have limited opportunities to monetize their creations directly. The Sandbox provides a platform where creators can monetize their games, assets, and experiences directly in a marketplace, earning SAND in the process.
• Barriers to Game Development: Creating games can be technically challenging and often requires extensive programming knowledge. The Sandbox addresses this by offering tools like the Game Maker, which simplifies game creation and allows even those without coding skills to build and deploy interactive games.

My experience in The Sandbox

I went to ​https://www.sandbox.game/en/​ and hit "enter the Metaverse".

After making a character, I downloaded the desktop application.

So far so good!

Opening the app, I'm presented with some options, of which I chose the tutorial called "First Steps":

 

I was surprised to see Snoop Dog greet me as I entered the tutorial. 

It just feels better to play it. It might be due to the desktop application (I tried Decentraland in the browser).

Still, the colors are more vibrant, the sound is better, and more "stuff" is going.

And the game guides me by giving me tasks, unlike in Decentraland where I had to pick a random event and never got a tutorial.

All in all, I liked The Sandbox, and I might come back to it.

In fact, the next quest rewarded SAND, the native token. And for the tutorial, I got a total of 12 NFTs, which are probably all worthless, but still, kinda cool!

Adoption & Partners

The most important metric for The Sandbox is the number of players.

More Players = More Adoption

The number of active users is estimated to be ranging between 50 and 300 since April 2024.

Back in 2021, at its peak, it ranged between 1,000 - 5,000 active users, so the decline has been stark.

The white line on the chart shows users:

 

Just like for Decentraland, this extreme drop-off in interest is likely due to the bear market combined with a declining hype around the metaverse in general.

Back in 2021, "everyone" was talking about NFTs and the metaverse. Facebook even changed its name to Meta.

No wonder why the valuations skyrocketed into the billions.

They also got some big brands creating stuff in The Sandbox:

 

I remember back in 2021, Snoop Dog held a concert in The Sandbox.

Steve Aoki also made his own little world and hosted parties and gave fans quests and rewards.

But are concerts and Smurfs enough to get The Sandbox back to the Billions?

Probably not...

But maybe!

Here's why:

The Future of Decentraland

Let's do some quick math and define a new metric I'll call "User value" (UV).

We'll divide the "Market cap" of The Sandbox by the number of "Unique active wallets" (we'll use the top of the current range):

MC / UAW = UV

$695M / 300 = $2.3M

So, currently, each user adds 2.3 million dollars to the market cap.

We found something similar with Decentraland and its completely insane.

Let's figure out what the user value was at the peak in 2021:

Market cap peak in 2021: $7B

Peak UAW in 2021: 7,000

So, the user value would be $7B / 7,000 = $1M.

So the UV is currently higher than at peak metaverse-hype.

That doesn't make sense to me, knowing what I know about the crypto market and network effects.

Nevertheless, there's only one way for The Sandbox to reach the market cap high of 2021 of $7 Billion:

It needs more users, and to keep those users coming back.

And what needs to happen for more users to join (and stay)?

1. More rewarding games: If they manage to reach Axie Infinity level economics in their games, where players literally made a living from playing, The Sandbox will explode.
2. More fan-focused worlds: Steve Aoki made a cool little world and invited all his fans to join it. They played games, had a concert, and hung out. If more celebrities do this (on a regular basis), lots of people will join.
3. Virtual Reality: In VR, everything The Sandbox does would be 10X more fun and engaging. VR would for sure be a huge catalyst for The Sandbox.

Conclusion

I like their focus on artists and games, instead of the broader aim of Decentraland.

I think The Sandbox has a better shot than Decentraland, and their vision is not fully reliant on VR tech.

But still, as with Decentraland, I believe Metaverse projects will be better in the next cycle when VR tech has matured.

Then, and only then, will we see these metaverse projects soar to the tens or even hundreds of thousands of users, and market caps in the tens of billions.

If you're up for the risk, investing at "low" valuations like the current market cap of $700 million might net you a 100X ROI if they pull it off.

Personally, I'll wait and see.